Chen Mingxing v Zhang Jian: Interim Injunction for OEL Shares Dispute

In Chen Mingxing and others v Zhang Jian and others, the Singapore High Court addressed an application for an interim injunction. The plaintiffs, Chen Mingxing, Deng Yuhao, Wu Jiaqi, Huang Hai, and Zhu Tao, sought to restrain the defendants, Zhang Jian, Zhao Xin, Liu Yunhua, Quak Choon Chai, Deng Rong, and Eminence Investment Pte Ltd, from disposing of shares in OEL (Holdings) Limited. The plaintiffs claimed they paid $7.7 million to invest in OEL shares, which the defendants disputed. The court granted the injunction, limiting it to 197,545,000 shares purchased on or around 2019-12-16. The court found serious issues to be tried regarding whether the defendants held the shares on trust for the plaintiffs or were unjustly enriched.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

Interim injunction granted with a limitation as to its scope to 197,545,000 of the ordinary shares in OEL which were purchased from Mr Hing on or around 16 December 2019.

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Singapore High Court grants interim injunction to restrain disposal of OEL shares amid claims of trust and unjust enrichment. Key issue: Investment contracts.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Chen MingxingPlaintiffIndividualInterim injunction granted in partPartial
Deng YuhaoPlaintiffIndividualInterim injunction granted in partPartial
Wu JiaqiPlaintiffIndividualInterim injunction granted in partPartial
Huang HaiPlaintiffIndividualInterim injunction granted in partPartial
Zhu TaoPlaintiffIndividualInterim injunction granted in partPartial
Zhang JianDefendantIndividualInterim injunction granted in partPartial
Zhao XinDefendantIndividualInterim injunction granted in partPartial
Liu YunhuaDefendantIndividualInterim injunction granted in partPartial
Quak Choon ChaiDefendantIndividualInterim injunction granted in partPartial
Deng RongDefendantIndividualInterim injunction granted in partPartial
Eminence Investment Pte LtdDefendantCorporationInterim injunction granted in partPartial

3. Judges

Judge NameTitleDelivered Judgment
See Kee OonJudgeYes

4. Counsels

Counsel NameOrganization
Quek Wen Jiang GerardPD Legal LLC
Ramachandran Doraisamy RaghunathPD Legal LLC
Feng ZhuoPD Legal LLC
Tey Jijie, LouisPD Legal LLC
Charmaine Elizabeth Ong Wan QiLegal Solutions LLC
Charanpreet KaurLegal Solutions LLC
Heng Gwee Nam HenryLegal Solutions LLC
Loh Hui-Qi VickiLegal Solutions LLC

4. Facts

  1. Plaintiffs transferred $7.7 million to EI's bank account.
  2. The funds were used to purchase OEL shares from Mr. Hing.
  3. The plaintiffs claim the defendants held the OEL Shares on trust for them.
  4. The plaintiffs claim the defendants were unjustly enriched.
  5. The defendants claim the funds were transferred pursuant to a Loan Agreement with WJ.
  6. The defendants allege the plaintiffs entered into "Investment Contracts" with WJ to procure employment passes.
  7. The defendants allege the plaintiffs submitted false educational certificates.

5. Formal Citations

  1. Chen Mingxing and others v Zhang Jian and others, Suit No 763 of 2020 (Summons No 3799 of 2020), [2021] SGHC 03

6. Timeline

DateEvent
Plaintiffs sought investment opportunities.
Plaintiffs sought investment opportunities.
Hongkong Huaxinxin Trade Co. Limited transferred $749,990 to EI.
Hongkong Huaxinxin Trade Co. Limited transferred $749,990 to EI.
HS International transferred $790,000 to EI.
HS International transferred $790,000 to EI.
HS International transferred $790,000 to EI.
Defendants and WJ entered into a Sales and Purchase Agreement with Mr. Jeffrey Hing Yih Peir to purchase OEL Shares.
3rd plaintiff transferred $750,000 to EI.
4th plaintiff transferred $750,000 to EI.
5th plaintiff transferred $750,000 to EI.
HS International transferred $790,000 to EI.
HS International transferred $790,000 to EI.
2nd defendant appointed Chief Executive Officer and Executive Director of OEL.
WJ became Executive Director of OEL.
IPA issued for the 3rd and 4th plaintiffs with AJJ.
1st defendant became Chairman and Executive Director of OEL.
WJ ceased to be Executive Director of OEL.
Plaintiffs issued letters of demand.
Plaintiffs issued letters of demand.
OEL entered into an agreement for the placement of ordinary shares in OEL with 16 subscribers.
Suit 763 of 2020 commenced.
OEL issued a letter to its shareholders regarding the proposed disposal of the Property and the Proposed Placement.
Interim injunction granted by the court.
Defendants requested further arguments.
Defendants requested further arguments.
Further arguments considered by the court.
Registrar's notice issued regarding the variation of the interim injunction.
Second registrar's notice issued clarifying the terms of the draft Order of Court.
Grounds of decision issued.

7. Legal Issues

  1. Interim Injunction
    • Outcome: The court granted the interim injunction, limiting it to 197,545,000 shares purchased on or around 2019-12-16.
    • Category: Procedural
    • Sub-Issues:
      • Serious issue to be tried
      • Balance of convenience
    • Related Cases:
      • [1975] 1 AC 396
  2. Resulting Trust
    • Outcome: The court found that there was a serious issue to be tried as to whether the 1st to 5th defendants held the OEL Shares on resulting trust for the plaintiffs.
    • Category: Substantive
  3. Constructive Trust
    • Outcome: The court found that there was a serious question to be tried in respect of whether a remedial constructive trust should be imposed over the OEL Shares in their favour.
    • Category: Substantive
  4. Unjust Enrichment
    • Outcome: The court found that there were serious issues to be tried as to whether the defendants were unjustly enriched by the plaintiffs’ monies.
    • Category: Substantive
    • Related Cases:
      • [2018] SLR 363
  5. Illegality
    • Outcome: The court determined that it was not appropriate to determine at this interlocutory stage whether the underlying “Investment Contracts” (if they existed) were void and unenforceable by virtue of being prohibited by the EFMA or otherwise tainted with illegality.
    • Category: Substantive
    • Related Cases:
      • [2020] 4 SLR 85

8. Remedies Sought

  1. Interim Injunction
  2. Order for an account of trust properties
  3. Tracing order
  4. Transfer of OEL Shares to the plaintiffs

9. Cause of Actions

  • Resulting Trust
  • Constructive Trust
  • Unjust Enrichment

10. Practice Areas

  • Commercial Litigation
  • Injunctions

11. Industries

  • Investment
  • Financial Services

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
American Cyanamid Co v Ethicon LtdN/AYes[1975] 1 AC 396N/ACited for the criteria for the grant of an interlocutory injunction.
Ochroid Trading Ltd and another v Chua Siok Lui (trading as VIE Import & Export) and anotherCourt of AppealYes[2018] SLR 363SingaporeCited regarding the principle of stultification precluding a claim in unjust enrichment.
Baker, Michael A (executor of the estate of Chantal Burnison, deceased) v BCS Business Consulting Services Pte Ltd and othersN/AYes[2020] 4 SLR 85SingaporeCited regarding the remoteness of illegality in relation to an independent cause of action in trust.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Employment of Foreign Manpower Act (Cap 91A, 2009 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • OEL Shares
  • Interim Injunction
  • Resulting Trust
  • Constructive Trust
  • Unjust Enrichment
  • Investment Contracts
  • Loan Agreement
  • Share Placement
  • Dissipation of Assets

15.2 Keywords

  • Interim Injunction
  • OEL Shares
  • Trust
  • Unjust Enrichment
  • Singapore
  • Shareholder Dispute

17. Areas of Law

Area NameRelevance Score
Injunctions90
Civil Procedure70
Trust Law60
Unjust Enrichment50
Company Law30
Shareholder Disputes20

16. Subjects

  • Trusts
  • Injunctions
  • Shareholder Disputes
  • Investment Law